THIRUVANANTHAPURAM: Ahead of the crucial GST council meeting in Lucknow on Friday, Kerala finance minister K N Balagopal on Thursday reiterated the state government’s stand against the proposal to bring petroleum products under GST regime.
The state, he said, would make all possible efforts to protest against the proposal by bringing together all other states that are against the Union government proposal. The GST council has been pushing forward the proposal to include petroleum products under GST tax regime for long, but the immediate reason that brings the subjects to the table of GST council is Kerala high court’s directive to discuss the feasibility of the proposal.
The Union finance ministry had in an affidavit submitted before the high court said that the GST council would discuss the subject on September 17. The Centre filed the affidavit in a petition filed by Kalady Sree Sankaracharya University former vice-chancellor M C Dileepkumar.
Balagopal said the government would try to evolve a consensus among states that are of the view that states have the right to fix tax on petroleum products. According to Balagopal, the arguments that bringing petroleum products to the GST fold would lead to steep fall in fuel price were not based on facts.
“The price of petrol and diesel would come down significantly only when the Centre stops collecting fuel cess. If the Centre is not ready to forgo the cess which it doesn’t share with states, price of petroleum products would remain the same even if it is brought under GST regime. States like Kerala cannot afford to lose the proceeds from fuel tax. If the Centre’s move materialises, Kerala’s revenue from fuel tax would comedown to Rs 6,000 crore from the current Rs 12,000 crore,” he said.
If petrol is brought under GST, the tax on per litre petrol would be 28% of petrol’s basic price Rs 39 per litre. In that scenario, the GST on petrol per litre would be only Rs 10.92. And, the state would be eligible for only Rs 5.46 as tax per litre of petrol. Currently, the state receives around Rs 20 as tax on the sale of per litre of petrol.
